Great Read in the FP: When Will Rates Peak? | GIC discussions | Discussion forum

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Ongoing thread ⬇

https://www.highinterestsavings.ca/forum/general-financial-discussion/when-will-rates-peak/

Dean

What is special about March 2024? Why would that be a turning point?

savemoresaveoften said
Check ur own crystal ball, it is as good as any, seriously.  

Well, it's a prediction, so it should be based on something (and it probably is).

I agree. If anyone has any useful info, I'm all ears! We will, of course, all come to our own conclusions.

The very weird thing is that, about an hour before Tommy posted this, I had the same thought, and it contradicts all my previous thoughts.

I'll see what happens over the next few weeks. If rates seem stuckish, I'll be looking at locking in some of my cash for this year.

I'll be looking mostly at five years. Some of the money that I held back last year because of low and rising rates will need to be four years now.
I probably won't go beyond five years because of my age (75) unless rates go up significantly for those longer terms. If I went long, I'd look on it as a kind of term annuity, with monthly payout (Motive), where I get the principal back in the end if I live that long. At five or six per cent, the income isn't that much different than annuity payments at my age - and you or your estate get all the principal back in the end. https://www.sunlife.ca/en/tools-and-resources/tools-and-calculators/annuity-calculator/

If I were younger, I might see it differently.

Not like I take the BoC's word on things or value their opinion more than anyone else, but they do make the policy and they say inflation rates are still going up. I'm pretty wary of anyone who says anything definitively when it comes to economics as the saying goes, a good economist is right 50% of the time.

BoC says inflation is to pass 8% as soon as next week and stay in that range for few more months

IMO, what that tells you is the people who decide whether to raise rates or not will most likely be raising rates in Sep, Oct and maybe Dec. Of this there is about a 50% chance

I'm not going to defend decisions made by the BoC since the world started going sideways in the early part of 2020. However, there's sure a lot of Monday morning quarterbacking going on. The BoC has constant data rolling in and has to make decisions after analyzing the information at hand. What they cannot do is predict global events such as Covid, wars and the cascading ripple effects like supply chain issues and oil prices. In the past year, or two, they've made statements such as, interest rates would stay low and inflation was transitory, fair enough if that was based on the data they had at the time when doing the projections. If global events remained static, then it's a breeze to make predictions and set rates, but that's not reality, nor will it ever be.

My predictions.
Right now BOC rate is 2.5%.
On September 7,2022 BOC rate will raise 0.5% or 0.75% and BOC rate will be 3% or 3.25%.
And, before end of the year, either on October 26 and/or December 7,2022 BOC will raise rate again either 0.25% or 0.5% total (one or two raises cumulative). Before end of 2022 BOC rate will be 3.25% or 3.5% max, no more.